Panama Rights of Possession Law
Panama has a very unique law which allows people to possess government owned land in order to make improvements upon it. It is called “Rights of Possession” (ROP).
Its history dates back during the military regime of General Omar Torrijos who ruled Panama from 1968 to 1981. His agrarian land reform included the “live
on government land and work it in order to have the right to possess it” concept.
ROP’s can be sold to third parties including foreigners.
ROP’s are not recorded with Panama’s Public Registry as titled land deeds are.
Agricultural ROP’s can be recorded with the Ministry of Agriculture Agrarian Reform offices. Beachfront, islands, and marine properties ROP’s are recorded with the Directorate General of the Surveyor in the Ministry of Economy and Finance. However, ROP’s located on other lands are not recorded in any central recording system.
Researching who owns a ROP on other lands requires contacting regional real property tax offices (Catastro), local Mayor’s office, and local justices of the peace (Corregidor) to see if they have documentation regarding a specific property’s ROP certification.
Converting Panama Rights of Possession into Titled Property
Recent laws have enabled Panama Rights of Possession owners to convert the ROP into titled property with a deed which can then be recorded with the Public Registry.
POLS can assist you with converting a Panama Rights of Possession into titled property.
Procedures for Converting Panama Rights of Possession into Titled Property:
- Client signs Professional Services Agreement for title processing.
- Client signs special Power of Attorney for title processing.
- Client submits payment to Attorney for 50% of legal fees + estimated expenses.
- Client provides Attorney with copy of the ROP Purchase Contract which will filed with the titling application.
- Attorney gathers and coordinates all property documents, certifications, survey, etc. needed for title application at ANATI (Autoridad Nacional de Tierras).
- Attorney coordinates all inspections.
- ANATI issues resolution for title.
- Public Notices are published in 3 newspapers.
- Public deed of title is issued at Public Registry.
The titling process used to take from 3 to 5 years. However, the government
restructured the Reforma, Pronat, and Catastro offices into a new ministry called ANATI (which means Autoridad Nacional de Tierras) in 2012. Currently, the titling process is only taking from 6 months to 1 year assuming all requirements have been met by the applicant.
Registered Property Value
The property’s registered value will be assigned at titling for property tax calculations at the value for which the ROP was acquired for.
Corporate Ownership of Property Title
For all titles that are processed using Panama corporations or Panama foundations as owners, it is important that the share certificates of the corporation are not issued to the Bearer. This means that the share certificates must be issued to the name of an individual person. The lawyer will need a photocopy of that individual’s identification. The shareholder should be appointed as a director, officer, and legal representative of the corporation or foundation.
The estimated overall expenses to process a property title are divided into three categories:
1. Legal Fees: The lawyer that handles the title application must spend many hours of time preparing documents, obtaining certifications, notarizing documents, submitting application for title, coordinating inspections with the various government agencies, as well as coordinating payments to the various people involved such as the surveyors, inspectors, mayor, sheriff, neighbors, notary, public registry, ANATI office, sending status reports to the client, etc. The lawyer charges a fee for his or her time involved in handling the entire process.
Total Legal Fee: $6,000 + 7% ITBMS (service / sales tax) = $6,420 USD
- $3,210 is paid at the moment of the application.
- $3,210 is paid when the title is issued.
2. Estimated Expenses:
- Surveyor Fee: $400 (or more depending on the size of the property).
- ANAM Certification: $50
- ARAP Certification: $350
- ANATI Inspections: $300
- Public Registry Certification: $75
- Notary Fees: $50
- 3 Notarial Declarations: $150
- Municipal Certification: $150
- Sheriff Certification: $100
- Public Notice Publications: $150
Estimated Total Costs: $1,775 USD
3. Government Costs: The government of Panama charges a price per square meter (m2) of land, and the price varies depending on what zone or region the property is located in. The price per m2 can range from $1 to $5 or more. For example, a beach front lot of 1000 m2 located in Santa Catalina, Sona, Veraguas Province currently has a price of $3 / m2, or a total of $3,000. In addition, ANATI charges a 5% processing / administrative fee.
Please Contact Us for a specific quotation for your particular land title.
Contact Us for assistance with processing a Panama Rights of Possession conversion into Titled Property or for all of your Panama Real Estate and Panama Relocation needs.